Monthly Archives: March 2012

by | March 19, 2012 · 2:48 am

How I stopped worrying and learned to love Twitter: Top Hundred Life Sciences Twitterers to Follow

By Steve Dickman, CEO, CBT Advisors

Amsterdam, Monday, March 19, 2012

Twitter last month hit a half-billion users and no wonder. What a valuable business tool! Adoption is accelerating in the biotech world. Initially I was skeptical – “What, me ‘tweet?’ You’ve got to be kidding!” But now I’m a believer.

Twitter has helped me find clients; introduced me to new and interesting people, increased the speed and accuracy of my responses to industry news; and given me ideas for blog posts. I’m even starting to say the dreaded word “tweet.”

For all the hype about Twitter’s role as a real-time wellspring of trivialities, and for all the righteous blather about its disputed role in fomenting revolution, the fact is that Twitter greatly enhances both my network and my appreciation for the news.

Now it’s time to give back, both live and online. Today (Mon. March 19, 2012), two Twitter veterans, Michael Gilman (@Michael_Gilman) of Stromedix (now Biogen Idec) and Simon Meier (@Venture_Invest) of Roche Venture Fund, and I will share some of Twitter’s benefits with the audience at a panel discussion at the BioEurope Spring conference (hashtag #BES12) in Amsterdam. This post will give my Boston Biotech Watch readers a quick way to increase the value they can derive from Twitter.

Below, my associate Ovid Amadi and I have created ten “Top Ten” lists of whom to follow on Twitter. Once you have opened a free account on Twitter, go to my feed and simply subscribe to whichever one of these lists you like. Or pick and choose among these top Twitterers as you build your own custom feed.

For those who cannot attend the session, you can still get an in-depth and hands-on intro to Twitter from this video, kindly posted by EBD Group after the “social media and biotech” panel that I moderated at the BioPharm America conference in Boston last September. On it, you will see how biotech execs and communications pros are using Twitter and other social networks to improve their access to industry intelligence, find jobs and project a strong professional image.

According to the invaluable summary graciously provided by blogger and tweeter Maude Tessier (@Maude_Tessier), “the savvy panelists made a compelling case for Twitter as:

An ideal source for real time data/news to inform business strategies

  • A helpful forum to poll the community on a subject
  • A platform to comment on the state of the life science industry
  • A way to better understand how people think
  • A tool to make new connections with companies and patient groups
  • A medium to build credibility for you and your organization.”

Another ringing endorsement for Twitter in life sciences came from Xconomy’s indefatigable Luke Timmerman (@ldtimmerman): http://www.xconomy.com/national/2011/09/12/what-most-biotechies-are-missing-by-avoiding-twitter-a-huge-networking-opportunity/

I can enthusiastically vouch for all that. Twitter: it’s the bomb.

# # #

Ten “Top Tens” for Twitter in Life Sciences

Compiled and annotated by Ovid Amadi and Steve Dickman (@cbtadvisors), CBT Advisors

Each tweeter’s name and handle is accompanied by a brief description as well as a classification as “PERSP” – providing primarily perspective, commentary, and opinions on topics; “INFO” – providing timely factual information and news stories; or both.

CONTENTS
I. Genomics
II. Health IT
III. Investing/Finance
IV. General News
V. Biotech News
VI. Science
VII. Healthcare/Medicine
VIII. VC/Entrepreneurship
IX. Service Providers
X. Benchmark Biotech/Life Sciences Twitter Users
Appendix

I. Genomics

1. INFO, @genome_gov – National Human Genome Research Institute
– Provides useful information and headlines in concise uncluttered format.
– Does not draw upon a single resource.
– Includes technical, policy, and commercial headlines
– Moderate tweet frequency

2. INFO, @GenomeBiology – Genome Biology
– In addition to scientific news features multiple links to blogs and opinion articles
– High tweet frequency

3. INFO, @genomeresearch – Genome Research
– Covers broad range of genomics topics
– Presents some opinions and personality in posts
– Multiple retweets from a variety of sources
– Moderate tweet frequency

4. INFO/PERSP, @23andME – 23andME
– Offers perspective articles with less focus on news
– Includes social perspective on implications of human genomics advancement
– Limited self promotional content and maintains relevance of such posts
– Exhibits noticeable personality and tone.
– Moderate tweet frequency

5. PERSP, @dgmacarthur – Daniel MacArthur
– Postdoc in genetics whose interests extend well into societal and commercial realm.
– A member of the genomes unzipped project aiming to disseminate information on and analysis of the field of genetic testing.
– Participates actively in conversations, retweeting, and original links
– Maintained an active blog.
– Informal tone.
– High tweet frequency

6. PERSP, @genomicslawyer – Dan Vorhaus
– Editor of Genomics Law Report
– Offers unique perspective of legal advisor specializing in genomics and personalized medicine.
– Much of linked content includes personal/professional opinions with nuanced and detailed discussions.
– Clear conventional and twitter specific syntactical organization
– Moderate tweet frequency

7. PERSP, @MishaAngrist – Misha Angrist
– Explores ethical, social, and health implications of personalized medicine
– Recently published a unique text and maintains populated blog
– Generally maintains focus on relevant issues while expressing commentary
– Moderately high tweet frequency

8. INFO, @NatureRevGenet – NatureRevGenetics
– Provides “Ahead of Publication” notifications of pertinent scientific reviews (more tractable than primary article)
– Moderate Frequency, useful for those interested in details of scientific advance

9. PERSP, @DivaBiotech – Ruby Gadelrab
– Affymetrix employee with primarily genomics focus
– Presents appropriate balance of retweet and original content and extraneous information is minimally distracting
– Abundant dialogue and interaction
– High frequency

10. INFO, @Knome – Knome, Inc
– Life sciences company interpreting human genomes
– Very little self-promotion
– Very few retweeting and content is noticeably interesting/unique (less mundane compared to similar providers)
– Low frequency

II. Health IT

1. PERSP/INFO @jhalamka – John Halamka
-CIO of BIDMC
-Tweets are introductions to his very active blog (contains personal elements) and numerous insights into healthcare IT as a field and career.
– No retweets
– Moderate frequency

2. PERSP/INFO @ahier – Brian Ahier
– Maintains a well populated blog on healthcare IT
– Provides a large sum of content with brief commentary/recommendation
– Broad range of health IT topics punctuated with unrelated, but interesting information
– High frequency

3. PERSP/INFO @IyaKhalil – Iya Khalil
– Co-founder of GNS Healthcare
– Comments on a range of topics including data analytics, genomics, and the biotech innovation
– Personalized tone connotes author’s perspective
– High frequency

4. PERSP/INFO @john_chilmark – John Moore
– Maintains a thorough blog with frequent in-depth discussion
– Frequently expresses opinions in tweets with good balance of perspective in information
– High frequency

5. INFO @iHealthBeat.org – iHealthBeat.org
– Content rich and well focused on Health IT field
– Includes links to news, analysis, and editorials
– High frequency

6. INFO @HITNewsTweet – Healthcare IT News
– Content rich, relevant posts primarily to parent site
– High frequency

7. INFO/PERSP @JohnSharp – John Sharp
– Primarily focuses on patient/clinical component of Health IT
– Provides daily summary of news pertaining to electronic medical records
– Perspectives often found within links not twitter posts
– Moderate frequency

8. PERSP @Anthony_Guerra – Anthony Guerra
– Links to parent site (healthcaresystemCIO.com) that features interviews with health care CIO’s with deep commentary and analysis
– Moderate frequency

9. PERSP/INFO @DonFluckinger – Don Fluckinger
– Generally features recommendations for and analysis of health IT components
– Maintains analytical/critical approach despite large number of posts
– Views are sometimes shared in twitter conversations
– High frequency

10. PERSP/INFO @boltyboy – Matthew Holt
– Eclectic mix of health IT topics and the author’s opinions
– User personality is apparent
– High frequency

III. Investing/Finance

1. INFO @businessinsider – Business Insider
– Mix of business and financial news with topics for a general audience
– Links primarily to Business Insider website
– Posts are designed to attract attention with tint of sensationalism
– High frequency

2. PERSP/INFO @zerohedge – Zero Hedge
– Offers a particular mix of opinion and information with links to parent blog
– Zero Hedge blog authors maintains anonymity to protect site integrity
– Exhibits a clear and unique activist/sarcastic tone
– Primarily original posts
– High frequency

3. INFO @StockTwits – Stock Twits
– Provides a less pedestrian description of financial news for a more seasoned investor
– High frequency

4. PERSP @PIMCO – Pimco
– Consists entirely of comments by Pimco’s co-chief investment officers
– Bill Gross posts express opinions and news without links
– El-Erian comments via links to newly published articles
– Moderate frequency

5. PERSP @jimcramer – Jim Cramer
– Former hedge fund manager, Mad Money host, and TheStreet founder
– Offers commentary and dialogue with regular references to Mad Money program
– Style is tailored to educated but not expert audience with casual tone
– High frequency

6. PERSP @herbgreenberg – Herb Greenberg
– CNBC senior stocks commentatory
– Engages in dialogue with users
– High frequency

7. PERSP @DougKass – Douglas Kass
– Journalist and investment manager
– Opinions, dialogue for the more informed investor
– News is dispensed primarily via short descriptions rather than links
– High frequency

8. INFO @MarketWatch – MarketWatch
– Comprehensive news headlines from MarketWatch website
– High frequency

9. PERSP/INFO @BioRunUp – BioRunUP
– Specializes in biotech trading
– High frequency

10. PERSP @BiotechtraderHB – Tony Pelz
– Active dialogue discussing investment strategies and events in the biotech industry
– High frequency

IV. General News

1. INFO @WSJ – Wall Street Journal
– Wall Street Journal headlines
– High frequency

2. INFO @nytimes – The New York Times
– The New York Times headlines
– High frequency

3. INFO @nprnews – NPR News
– NPR News headlines
– High frequency

4. INFO @TheEconomist – The Economist
– The Economist headlines
– High frequency

5. INFO @washingtonpost – The Washington Post
– The Washington Post headlines
– High frequency

6. INFO @TheOnion – The Onion
– The Onion headlines
– High frequency

7. INFO @cnnbrk – CNN Breaking News
– CNN headlines
– High frequency

8. INFO @bloombergnow – BloombergNow
– Bloomberg headlines and editorials
– High frequency

9. INFO @digg – Digg
– Digg headlines
– High frequency

10. INFO @AJEnglish – Al Jazeera English
– Unique perspective on international events
– High frequency

V. Biotech News

1. PERSP/INFO @gautamkollu – Gautam Kollu
– VP Marketing at Exelixis
– Range of topics include development drug, capital markets, and cancer
– Succinct posts with commentary and relevant retweets
– Engages in dialogue regularly
– High frequency

2. PERSP/INFO @pharmalot – pharmalot
– Most original tweets link to a very active blog written by Ed Silverman
– Each morning provides collection of headlines from various sources
– Blog content highlights interesting events with author’s commentary
– Tweets offer provocative/intriguing introductions
– Moderate tweet frequency

3. PERSP/INFO @rleuty_biotech – Ron Leuty
– San Francisco Business Times Biotech reporter
– Links to blog compiling San Francisco Bay Area biotech stories running in the San Francisco Business Times and Silicon Valley/San Jose Business Journal
– Retweets from a diverse group of users
– High frequency

4. INFO @FierceBiotech – FierceBiotech
– Links to broad range of biotech science and industry news
– Concise tweets
– High frequency

5. PERSP/INFO @eyeonfda – eyeonfda
– Author, consultant/attorney Mark Senak, specializes in regulatory issues
– Perspective on impact and implications of regulatory events
– Includes many links to general biotech/pharma news
– Moderate tweet frequency

6. INFO @Genbio – GEN
– Links to Genetic Engineering & Biotechnology News website
– Features biobusiness, drug discovery, omics, bioprocessing, and translational medicine
– Frequent use of twitter hash tag syntax
– High frequency

7. INFO @FiercePharma – FiercePharma
– Broad range of pharmaceutical industry news with occasional retweets
– High frequency

8. INFO @BioMedReports – BioMedReports
– Healthcare stock and investing headlines and related news
– Retweeting is rare
– High frequency

9. INFO @BioPharmaToday – Josh Berlin
– Elsevier Business Intelligence – publishers of The Pink Sheet, IN VIVO and PharmAsia News
– Focused on business development strategy, drug development, and regulation
– High Frequency

10. PERSP/INFO @reutersBenHir – Ben Hirschler
– Pharma, health and science correspondent for Reuters in London
– European news and perspective related to pharmaceutical industry
– Includes general worldwide financial/economic commentary
– High frequency

VI. Science

1. PERSP/INFO @NatureNews – Nature News & Comment
– News and opinion (not research articles) from Nature Magazine
– Engages in dialogue
– High frequency

2. PERSP/INFO @wiredscience – Wired Science
– Wired Science blog from Wired magazine
– Themed for general public and science enthusiasts
– Moderate frequency

3. INFO @sciam – Scientific American
– Scientific American article and blog posts
– Content from additional sources provided via retweets
– High frequency

4. PERSP/INFO @newscientist – New Scientist
– New Scientist Magazine covering space, tech, environment, health, life, physics/math, and science in society
– Includes original articles, blogs, and opinions
– Content from additional sources provided via retweets
– High frequency

5. PERSP/INFO @nytimesscience – New York Times Science
– Science, environment and space news from the New York Times
– Features articles, blogs, letters and opinions
– Few retweets
– High frequency

6. PERSP/INFO @carlzimmer – Carl Zimmer
– Prolific science writer, maintains blog “Loom” at Discover Magazine
– Covers broad range of science topics and news
– Frequent retweets and dialogue with users
– High frequency

7. PERSP/INFO @guardiansciblog – Guardian Science Blogs
– Science blogs from The Guardian covering general science, physics, and nature, and science in the general news
– Moderate frequency

8. INFO @DiscoverMag – Discover Magazine
– Discover Magazine content with additional sources
– Includes content about science and scientists
– High frequency

9. PERSP/INFO @NatureBiotech – Nature Biotechnology
– Journal covering the science and business of biotechnology
– Diverse content: research articles, science news, business news, and blogs
– Contains relevant retweets
– Moderate frequency

10. PERSP/INFO @mattwridley – Matt Wridley
– Author of books on evolution, genetics, and society
– Maintains and links to a blog: “The Rational Optimist”
– Provides content at the interface of science and its social implications
– Moderate tweet frequency

VII. Healthcare/Medicine

1. INFO @nytimeshealth – NYTimes Health
– Health news from the New York Times
– High frequency

2. PERSP/INFO @HarvardHealth – Harvard Health
– Links to Harvard Health Publications, news and information about treatments and disorders
– Includes “Ask Doctor K” section
– Moderate frequency

3. INFO @AmerMedicalAssn – AMA
– American Medical Association provides news and information relating to the health professions
– High frequency

4. PERSP/INFO @WSJHealthBlog – WSJ Health Blog
– Links to blog entries providing both information and commentary on health and health business topics
– Moderate frequency

5. PERSP/INFO @MayoClinic – Mayo Clinic
– Articles from the Mayo Clinic concerning health issues and treatments and advice
– Moderate frequency

6. PERSP/INFO @Health_Affairs – Health_Affairs
– News and opinions regarding health, healthcare, and public health/policy
– Moderate frequency

7. INFO @NPRHealth – NPR Health News
– NPR Health news articles ranging from research advances to social issues
– Moderate frequency

8. INFO @NEJM – New England Journal of Medicine
– Variety of content from the New England Journal of Medicine
– Moderate frequency

9. INFO @Lancet – Lancet
– Content from the Lancet Journal
– Moderate frequency

10. PERSP @PaulFLevy – Paul Levy
– Former CEO of Beth Israel Deaconess Medical Center in Boston, MA
– Authors prolific healthcare blog which is frequently the subject of tweets
– Moderate tweet frequency

VIII. VC/Entrepreneurs

1. PERSP/INFO @venturehacks – Venture Hacks
– Advice for startups
– News, employment, funding opportunities
– Much content provided via retweets
– Moderate frequency

2. PERSP @RealEndptsEllen – Ellen Licking
– Editor and writer for Value and Innovation Blog
– Each original post features author’s opinion or commentary
– Frequent retweets with new author comments
– Moderate frequency

3. PERSP/INFO @DavidASteinberg – David Steinberg
– Partner at PureTech Ventures, co-founder of 6 startups
– Early stage investment in novel therapeutics, medical devices, diagnostics, and research technologies.
– Topics include general science, regulation, and biotech innovation/investing
– Primarily dialogue and commentary reflecting author’s view with occasional links
– High frequency

4. PERSP/INFO @bijans – Bijan Salehizadeh
– Managing Director at NaviMed Capital
– Late stage investors in medical technology, healthcare services and health IT
– Dialogue, retweets, and abundant commentary
– Moderate frequency

5. PERSP/INFO @GoogleVentures – Google Ventures
– Google’s venture capital arm
– IT/technology specific content in addition to general discussion on entrepreneurship and career resources
– Moderate frequency

6. PERSP/INFO @ScottKirsner – Scott Kirsner
– Boston Globe columnist
– Focused on start-ups, venture capital and innovation in New England
– Dialogue, retweets, and abundant commentary
– High frequency

7. INFO @BioStartUp – Ed Y Lu PhD
– Industrial researcher
– Links to news articles relating to medical innovation in research and business
– Concise tweets
– Moderate frequency

8. INFO @Sequoia_Capital – Sequoia Capital
– Venture firm in energy, finance, healthcare, energy, mobile, internet and technology sectors
– Provides promotional content and resources for entrepreneurs
– Moderate frequency

9. PERSP @msuster – Mark Suster
– Entrepreneur turned VC – blog Both Sides of the Table
– Primarily dialogue with recommended links to blog or via retweets
– Moderate frequency

10. INFO @peHUB – peHUB
– Venture capital and private equity headlines with links
– Concise tweets
– High frequency

IX. Service Providers

1. INFO @BostonBioTech – BBCR
– Boston Biotech Clinical Research – Clinical strategy and trial design specialists
– Links to content focusing on rare disease, orphan indication and clinical trials
– Moderate frequency

2. PERSP/INFO @PearlF – Pearl Freier
– Founder of Cambridge BioPartners, Inc
– Innovative networking, recruiting and strategic business development
– Primarily dialogue
– Moderate frequency

3. PERSP/INFO @Comprendia – Comprendia
– Biotechnology and life science marketing, social media and business development
– Engages in dialogue and occasionally posts links
– Moderate frequency

4. PERSP/INFO @ideapharma – IDEA Pharma
– Pharmaceutical design consulting company
– Commentary and links concerning innovation in biotech industry
– Technical and strategic approaches
– Moderate frequency

5. PERSP/INFO @biotechPatent – Brian R. Dorn, PhD
– Patent attorney working on biotech, biosimilars, nanobiotech, and phamaceuticals
– Moderate frequency

6. PERSP/INFO @ipwatchdog – Gene Quinn
– Patent attorney
– Provides news and commentary while engaging in significant dialogue
– Moderate frequency

7. PERSP/INFO @McKQuarterly – McKinsey Quarterly
– Business journal of McKinsey & Company
– Articles on aspects of managerial strategy
– Moderate frequency

8. PERSP/INFO @StevenRothberg – Steven Rothberg
– President of CollegeRecruiter.com
– Advice and commentary and employment searches and recruiting
– Moderate frequency

9. INFO @WJNPharma_Jobs – Wiley Pharma Jobs
– Pharmaceutical and biotech recruitment service
– High frequency

10. INFO/PERSP @achrismanEBD – Anna Chrisman
– EBD Group Senior Manager, Conferences and Program – facilitating strategic partnerships in the biotechnology/pharmaceutical industries
– Provides information on conferences, events, and partnerships
– Tweets are focused, concise, and clearly express opinions
– Relatively lower frequency of link tweeting; the tweet itself is often the extent of the commentary
– Low frequency

X. Benchmark Biotech Twitter Users

These are individuals in the biotech industry actively engaged in social and professional Twitter activity. While focused on the industry, they are engaged across a broad spectrum of topics and discussions.

1. Steven Dickman @cbtadvisors – Founder/CEO of CBT Advisors
2. Bruce Booth @LifeSciVC – Biotech VC
3. Cynthia Clayton @Alnylam – RNAi Biopharmaceutical Company
4. Adam Feuerstein @adamfeuerstein – Sr. Columnist TheStreet
5. John Fierce @JohnCFierce – editor FierceBiotech
6. Michael Gilman @Michael_Gilman – Founder/CEO Stromedix
7. Carlos Velez @LacertaBio – Pharma/Bio Business
Development, Licensing, & Consulting.
8. Daphne Zohar @daphnezohar – Founder & Managing Partner,
PureTech Ventures
9. John LaMattina @John_LaMattina – Sr. Partner PureTech
Ventures
10. Carol Gallagher @carol_gallagher – Past CEO of Calistoga Pharma
11. Richard Pops @popsalks – CEO Alkermes
12. Richard Heale @ThinkingPharma – CEO ThinkingPharma
13. Tim Walbert @HorizonPharmaCEO – CEO Horizon Pharma
14. David Williams @HealthBizBlog – Co-founder MedPharma
15. Bill George @Bill_George – former CEO Medtronic
16. Chris Hogg @cwhogg – CEO 100plus
17. James Tayloer @JTBiotech – CEO Precision Nanosystems
18. Tim Ravenscroft CEO @Lentigen – CEO Lentigen
19. John Halamka @jhalamka – CIO of BIDMC
20. Omar Ishrak @MedtronicCEO – CEO Medtronic

Appendix: Approach

These “Top 10” Twitter lists represent groups of Twitter users who in sum create a thorough and diverse ensemble of twitter users in a specific subject area. The lists were compiled for an audience of life science professionals and are partially based on the preferences of our “Benchmark Biotech Twitter Users” as well as the authors’ own preferences. Each tweeter’s name and handle is accompanied by a brief description as well as a classification as “PERSP” – providing primarily perspective, commentary, and opinions on topics; “INFO” – providing timely factual information and news stories; or both.

# # #

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by | March 13, 2012 · 6:57 am

Can the Amgen Takeout of Micromet Juice German Biotech? Can Anything?

By Steve Dickman, CEO, CBT Advisors

Now that Germany has had its first billion-dollar biotech exit, it seems it would be about time for the beleaguered German biotech sector to enjoy a welcome jolt of juice. Amgen plans to lay out $1.16 billion in cash to acquire Micromet (NASDAQ: MITI) in a deal announced on January 26.

Generally, big exits create new opportunities. As a wishful example, consider the impact of the upcoming monster $10 billion IPO of Facebook, which will likely spark financially secure engineers to start new companies and multimillionaire founders to start new venture funds.

So is it time to celebrate in Germany? Not exactly. But there may be some good news for German biotech if we dig deep enough. I believe that the Micromet acquisition and other recent successes could serve as a valuable proof-of-concept for biotech products and technologies “made in Germany.” There are plenty of seedlings growing up from German universities and spinning out of existing companies. This is a good time to focus on them.

Tough trickle-down

Amgen’s big-ticket acquisition will likely not translate directly into a rash of new startups. The techniques used in inventing Micromet’s products – bispecific antibodies for systemic treatment of cancer and other severe diseases – are not easily transferred. Amgen has said that it intends to retain virtually all two hundred employees located at the Munich site. Some itchy would-be founders may eventually leave but the short-term impact will be limited.

More difficult for the German biotech scene, Micromet has not been a purely or even mostly German company for a long time. Its January, 2006, reverse merger with the failed California biotech CancerVax gave it a NASDAQ ticker symbol and a U.S. headquarters. The company raised $328 million in total of which $264 million came in PIPEs and follow-ons following the CancerVax merger. There was also approximately $60 million cash on hand at CancerVax when the companies merged.

Despite its impressive size, the Micromet exit is surprisingly no more than “a mediocre hurrah” for local VCs, one Germany-based VC investor told me. “VCs here have mixed feelings about this deal since … very few investors [who made initial investments into the company] were able to make money.”

Dollars slipping away

Why not? Clinical trials were going to be expensive. Likely acquirers were far away. Some funds faced restrictions on cross-border or public investing. Others simply did not have the money to push a company so far towards clinical proof-of-concept. The lack of local capital threatened to leave the company unable to prove the value in its innovative products. Hence, many of the gains were made by investors in public shares such as crossover funds and hedge funds.

Before I unveil my modest proposal for how to help the next crop of projects and companies in Germany, let’s look at where we are, how we got here and then I’ll return to where we can go next.

Bye-bye bubble

The world’s biotech boom of the late 1990s and early 2000s proved to be too much of a bubble for many German companies and investors. Some early companies were not built for sustainability and after some 2000-era fairy-tale financings on Frankfurt’s Neuer Markt, public biotech investors in Germany were badly burned. They have largely not returned.

The situation is not much better for venture capital funds. Otello Stampacchia, managing partner at Omega Funds, one of the institutional investors with the longest-term stake in Micromet, said that the VC shortage afflicting Europe is “particularly bad in Germany. Compared to what has happened, say, in the UK, there has been a colossal shrinkage.”

What is left in Munich, Berlin, Stuttgart, Heidelberg and other fertile biotech regions is both promising and problematic: truly world-class science; experienced entrepreneurs and employees; over eight hundred companies; and a severe lack of both venture and growth capital. Hence, in Micromet’s case, the truly creative solution of a reverse merger in 2006 and the successive financings in 2006, 2008, 2009 and 2010.

MITIgating factors

The company’s big exit, albeit on a leukemia product not yet been approved by FDA, is a beacon of light for German startups. I asked eight venture and public investors in Germany about the acquisition’s impact and the response was one of optimism tempered with caution. “The general message is positive, namely, that German biotech is capable of turning cutting-edge basic research into a full-blown company,” said one financial VC in Munich.

The capital shortage that Micromet encountered in Germany is emblematic of issues faced everywhere by therapeutics startups: the more innovative you are, the tougher it is. It takes more time than a VC fund lifetime of ten years for such technologies to reach Phase 3 or commercial status or achieve a big exit. A typical timeline is fifteen years. (Micromet was founded in 1996.)

Micromet rings the bell

Micromet rings the bell

Now that Micromet has proven the case for innovative biotech products nurtured in Germany, the burning question for investors, one of them told me, is “whether deals like the Micromet M&A creates more international VC activity in Germany.” With IPO markets shuttered and little in the way of growth capital, I suspect that the answer is likely “not anytime soon.”

But even if traditional VC does not return in significant amounts to Germany, some of the near-ripe fruit there is worth watching. Those companies include two that had the honor of presenting at the 2012 JP Morgan Healthcare Conference: NOXXON, based in Berlin, which is carrying out multiple clinical trials in a variety of high-value indications for its exciting spiegelmer technology; and Probiodrug, based in Halle, which is pursuing a unique and highly interesting approach to treating Alzheimer’s disease by attacking the underlying disease biology in a novel way. A third company, Curetis in Stuttgart, announced in November that Roche Venture Fund had made an investment alongside a Netherlands-based financial VC fund, Forbion. Curetis’ technology can rapidly identify pathogens causing hospital-acquired or severe community-acquired infections like pneumonia by bringing highly multiplexed PCR reactions into the hospital lab.

Those are just the most advanced companies. There are many more behind them and their technologies and approaches have much to offer. (Affimed in Heidelberg and Synimmune in Tübingen are just two examples in the bispecific antibody space.) Consider the technology areas in which German companies have thrived: they are mostly intricate (like Micromet’s bispecific antibody technology or Curetis’ 50-analyte PCR); they are more likely to be enabling technologies than therapeutic products (one local expert estimated that only fifteen or twenty of those eight hundred companies are working on therapeutic products that they themselves intend to develop); these enabling technologies cost $10 million to $50 million (or more) to develop; and, once mature, they will turn out to be highly valuable to big industrial companies in pharmaceuticals and related sectors like diagnostics. Stellar examples, aside from Micromet, are easy to spot:

MorphoSys: inventor of an antibody generation technology, this venture-backed startup nearly succumbed in the early 2000s to the same shortage of capital that forced Micromet out of Germany, then “went public on a hope and a prayer,” according to one investor. “Now it’s a real company,” he said, with a recent market cap of $420 million.

Direvo: an enzyme engineering business for protein therapeutics sold in 2009 for $230 million to Bayer Schering; the original technology was spun out into the “new Direvo” and is now in innovative use for industrial enzyme development; like the original Direvo, it is based in Cologne.

Jerini: a therapeutics company in Berlin acquired by Shire in 2008 for € 328 million ($521 million).

Brahms: a molecular diagnostics company acquired by Thermo Fisher in 2009 for $479 million.

MTM Laboratories: a molecular diagnostics company in Darmstadt acquired by Roche in 2011 for up to € 190 million ($269 million).

No one doubts Germany’s ability to generate attractive up-and-coming academic projects and small companies.  As one investor put it, “the start-up scene is healthy and ‘well-seeded’ by various grant systems like GO-Bio and government-affiliated institutions such as High-Tech Gründerfonds.”* The bottleneck is capital.

Pharma to the rescue?

Last time I checked, the pharmaceutical industry was shutting down internal research and scouring the world for innovation. Some pharma CEOs are saying that pharma should not invest in internal R&D at all any more. By contrast, pharmaceutical companies are beefing up their corporate VC activities. I count no fewer than twelve VC funds affiliated with pharmaceutical companies, some of which have roots in Germany (Boehringer Ingelheim) or German-speaking Europe (Novartis) and some of these have a strong interest in clinical diagnostics (Roche).

All these funds need look no further than Germany. What a fit! On top of the fertile environment for technologies, labor is relatively cheap. As I learned as a venture capitalist in a Germany-based fund, the cost of a laboratory worker in Germany is roughly half of the cost in the United States and the quality of their work is as high if not higher.

And the managers needed to bring technology platforms to proof of concept are present in larger numbers than at any time in the country’s history. They have worked by the dozens in German companies that have had solid exits – starting with Micromet and extending to Brahms, MTM Laboratories, Direvo, Jerini and MorphoSys – and strong sales – Evotec, Miltenyi and Qiagen in addition to the local pharmaceutical industry (Bayer Schering, the former Sanofi Aventis, and Boehringer Ingelheim).

The growth capital bottleneck should present no major obstacle to corporate venture investors who are both investing more and also increasingly working side-by-side in companies such as Aileron Therapeutics and Celladon Corporation, US-based companies that have attracted four corporate VCs each.

If pharma is the investor then the exit could well be integration into one or another pharma company’s own research efforts. Investing with the aim of achieving technical proof of concept in therapeutics or early commercial validation in the case of non-therapeutic platforms would alleviate the need for fifteen years of funding. The “harvest” could come much earlier. But who knows? Once investors see that their efforts are being rewarded, they might choose to let the companies carry on independently, issuing technology dividends and financial dividends alike.

What’s missing is a catalytic action on the part of those VCs, especially corporate VCs, already active in Germany together with the German government. A government co-investment growth fund of € 200 million or € 300 million, actively managed and investing in each deal alongside a minimum of two corporate or financial VCs, could make a huge difference. The seedlings are beginning to grow. Time to water them.

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Disclosure: Steve Dickman or CBT Advisors have worked recently with Curetis, Direvo and Probiodrug and previously with Evotec, Jerini, MorphoSys and NOXXON.

*GO-Bio has financed thirty-four projects in four rounds, leading to fifteen companies. High-Tech Gründerfonds, also based in Berlin, which finances high-tech startups including those in medical technology- and healthcare-related fields, has been active since 2005 and recently began investing a second fund of € 288.5 million.

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